JPMorgan analysts have identified the trend known as “debasement trade” as a lasting phenomenon. This trend highlights that gold and Bitcoin 
$97,310 have become fundamental components of investment portfolios.
Bitcoin and Gold
Debasement trade is a strategy of shifting towards assets like gold and Bitcoin, considering factors such as rising government debt, geopolitical tensions, and inflation fears. This strategy is gaining traction as investors worry about a resurgence of inflation.
Developments in the Cryptocurrency Markets
Analysts noted that gold prices have risen more than expected over the past year, relative to the movements of the dollar and bond yields. The report emphasized that the revival of debasement trade, along with record capital inflows into the cryptocurrency markets in 2024, has positioned Bitcoin as a significant asset in investor portfolios.
“The unexpected rise in gold prices indicates a revival of debasement trade,” said Nikolaos Panigirtzoglou, the lead analyst of the report.
Furthermore, traditional financial institutions like Morgan Stanley are allowing financial advisors to recommend Bitcoin ETFs to their clients, increasing interest in cryptocurrency markets. Analysts predict that flows into the crypto sector will reach $78 billion in 2024, with a significant portion directed towards Bitcoin investments.
MicroStrategy’s Bitcoin purchases contributed 28% to the total influx of participants entering the crypto market. Additionally, the completion of most liquidations from the bankruptcies of Mt. Gox and Genesis is viewed as a positive development for the market.
Analysts anticipate that cash payments expected from the FTX bankruptcy could be redirected towards cryptocurrency investments by late 2024 or early 2025. These developments indicate that investors are diversifying their portfolios by embracing digital assets alongside traditional ones.
